Processing Payment Orders by Privatbank in Cyprus

Tuesday, 3 January 2017

Following references in the press to problems concerning the operations of the Cyprus branch of Privatbank and, specifically, in the execution of payments, the Central Bank of Cyprus (CBC) provides the following clarifications:

As already announced, on 18 December 2016 the Ukrainian Government decided to proceed with nationalisation and recapitalisation of Privatbank which holds a license to operate in Cyprus through a branch. The recapitalisation process started on Monday 19 December 2016 and was completed on Thursday 22 December 2016. During this time period, the bank and consequently the branch were under the management of a temporary administrator who was appointed by the competent authority in Ukraine, with a specific mandate, which did not include the execution of any transactions.

On 21 December 2016, the CBC exercising its powers under the Business of Credit Institutions Law, taking into consideration the developments in Ukraine and for the purpose of protecting the creditors of the branch, imposed restrictions on the banking business license of the said bank in Cyprus. More specifically, the bank in Cyprus cannot carry out any operations other than the repayment or renewal of existing deposits, accept repayment of loans and advances previously granted and settle administration expenses in connection with the operations of the branch.

It is noted that, after the completion of the nationalisation procedure in Ukraine, the appointment of a new manager for the Cyprus branch was expected. The new manager assumed his duties on 29 December 2016. Till this date, it was inevitable that certain difficulties would arise in the normal course of business for the branch.

Bearing in mind the above and the fact that the execution of payment orders in any case falls within the remit of the management of every bank after considering all facts in its disposition, in case where a payment order is not executed, the CBC urges the customers concerned to contact the branch directly in order to clarify the matter. For more information, customers may also contact the head offices of the branch in Ukraine (telephone: 00380567161131, email: privatbank@privatbank.ua, hotline@privatbank.ua) or the National Bank of Ukraine (telephone: 00380442530180, email: nbu@bank.gov.ua).

The Central Bank of Cyprus (CBC) was established in 1963, shortly after Cyprus gained its independence, in accordance with the Central Bank of Cyprus Law, 1963 and the relevant articles of the Constitution. Today the CBC is governed by the Central Bank of Cyprus Law, 2002 as amended (hereafter “the CBC Law”).